Inside Move: <I>Le joie</I> of being an also-ran

VUE suitors fall away as offers are spurned

NEW YORK — As the Vivendi Universal Entertainment auction-from-hell plays out its agonizingly drawn-out final act, spare a moment for the list of jilted lovers.

John Malone, Marvin Davis and Kirk Kerkorian all bowed out after the fickle French firm spurned their offers for VUE.

A disinterested Barry Diller, his own failed 1994 bid for Paramount still ringing in his ears, was cast out of the playpen early on, and Viacom’s Sumner Redstone has had to watch while choice cable nets were dangled overhead but remained out of reach due to Viv’s inability to easily break up the VUE pieces.

Comcast’s Brian Roberts declined to play the Viv U bidding war spin game at all, opting not to even place a wager after his team’s crash course in media company valuation.

So are any of the “losers” the worse for it?

Diller, who many believed would play a key role, has for a second time dabbled with a studio takeover but walked away. However, he walks away with both ego (his e-commerce empire is booming) and wallet (Diller’s personal 1.5% stake in VUE is guaranteed at $275 million) intact.

Roberts played prudently and now may lust for more cable network deals, if not an even bigger nugget like Disney. Walking away from the VUE trap boosted the cabler’s stock, as it did Malone’s Liberty Media. The Denver-based holding company has never had much of a reputation for management, and the company already has its hands full with ailing overseas cable ops and QVC.

The deal-starved private equity firms prepared to back Davis, MGM and Bronfman now have money burning holes in their pockets. And Davis also is left sitting on a pile of dough. But does he really have the heart or stomach to chase another Hollywood dream?

For MGM, losing out on VUE was arguably a strategic and financial loss. In the aftermath, Kerkorian has been buying up MGM stock at the princely sum of $16, reflecting a valuation multiple higher than the U valuation that the Lion balked at.

Either he is buying the shares to prop up value as investors worry about profitability, or else maybe the plan is to take MGM private. Without VUE, MGM must still search for a distribution bolt-on or an interested buyer. Both are in short supply these days.

Even the final two contenders, GE and Edgar Bronfman Jr., would return to life as before — Edgar the wandering scion in search of a song and GE back to plastics — should their deals fall flat.

From the beginning of this painful sale saga, the pundits insisted that VUE was an acquisition that no one absolutely had to have. Maybe so, but some mighty big egos and checkbooks are now milling around, their appetites no doubt whetted for a deal … any deal.